FAQ

If I pursue my claim in court, will I be punished with a higher premium?

Your pursuing a legitimate claim, even in court, does not automatically give the insurance company the right to punish you with higher premiums. After all, what is the point of paying for insurance if you are afraid of filing a valid claim or protesting the unfair handling of a claim? Additionally, there are a number of restrictions that can apply to raising premiums. For example, if you are a member of a group policy, the whole group premium must be raised – not just yours. In other cases, the insurance company may have to receive approval from the Department of Insurance to raise rates.

What happens if my case is not accepted by Shernoff Bidart Echeverria LLP?

Although we wish we could handle every case that comes our way, the high volume of possible cases makes this a logistic impossibility. In many instances, our Intake Department may immediately refer a client to another qualified law firm. If we are unable to help you, we try our hardest to find a firm that can.

If my case is accepted by Shernoff Bidart Echeverria LLP, am I going to be involved in a trial?

Not necessarily. In fact, the majority of cases we handle are resolved by settlement, which can occur right away, prior to a scheduled trial or even during a trial. Your dispute may also be mediated by a neutral third party, who serves to help both sides reach an agreement.

How does Shernoff Bidart Echeverria LLP decide which cases to handle?

Our Intake Department is staffed by new case analysts who personally talk with each and every person who contracts our firm. These analysts record the details of the scenarios they hear and present them to our weekly new case conference. At this conference, our attorneys discuss the merits of each case. If a case is deemed to have sufficient merit, it is accepted, and a retainer agreement is signed with the client.

What is the philosophy behind punitive damages awards?

If a policyholder commits insurance fraud, he or she may go to jail. Because insurance companies don’t go to jail when they commit fraud, they must be punished monetarily. The only way to monetarily punish a company that makes millions or billions of dollars in annual revenue is to take enough of its profit to make the punishment felt. Yet amazingly, most punitive damage awards represent only a tiny fraction of a company’s surplus.

What are punitive damages? How does one collect them?

In addition to awarding a plaintiff actual damages and damages for emotional distress and/or physical injury, the court may assess punitive damages against an insurance company to serve as a punishment and deter the company from acting in bad faith again. For this to occur, it must be proven that the insurer acted with malice, fraud or oppression.

Can I sue my insurer for emotional distress resulting from the bad faith handling of my claim?

In general, yes. In many instances, an insurance companys unreasonable denial or delay of a valid claim can result in life-altering misfortunes, such as repossession of property, refusal of needed medical care, foreclosure of a business, etc. These events naturally can have substantial emotional and/or physical repercussions, and those who suffer them are often compensated when bad faith is substantiated.

Why don’t all lawyers work on the contingency fee basis?

Many corporate lawyers and lawyers who defend insurers are paid by very wealthy companies. As these lawyers often defend those companies, there is no winning verdict from which to take a percentage. So they must charge by the hour. Because of this, they benefit from lengthening the paper trail involved in legal actions. The longer the case drags on, the more difficult it is for a law firm working on a contingency – fee basis to sustain its cause of action against them – and the more hours they are able to bill their clients.

Why does Shernoff Bidart Echeverria LLP work on a contingency fee basis?

The reason is simple. It is to allow anyone – not just the privileged or wealthy – access to the legal system. The majority of our clients cannot afford to pay the hourly fees associated with undertaking a legal action, especially against multi-million dollar enterprises such as insurance companies. By enabling anyone to retain the services of talented bad faith lawyers, the contingency fee gives the little guy a fighting chance.

Lawyers at Shernoff Bidart Echeverria LLP work on a contingency fee basis – what exactly does that mean?

It means that there are no hourly fees assessed to our clients. We charge a fee only if and when we are successful in recovering money on behalf of our clients. Only when a verdict or settlement is reached and paid to a client do we receive a percentage of that. If a settlement is not reached or the case is lost, we receive no fee whatsoever.

What happens if my case is not accepted by Shernoff Bidart Echeverria LLP?

Although we wish we could handle every case that comes our way, the high volume of possible cases makes this a logistic impossibility. In many instances, our Intake Department may immediately refer a client to another qualified law firm. If we are unable to help you, we try our hardest to find a firm that can.

Although we are highly specialized to handle insurance bad faith cases we do occasionally handle other victim-related legal matters, such as major medical malpractice or catastrophic personal injury cases.

How come the Shernoff Bidart Echeverria LLP law firm is so successful?

Several reasons. The most important is that we care deeply about our clients and believe in what we do. Others are that we pioneered bad faith law and have advanced it ever since. Plus, we are possibly the only law firm in the world that practices bad faith insurance law with such major focus. Finally, we are, quite frankly, feared by insurance companies – so when we talk, they listen.

Are there deadlines that can affect my taking legal action against my insurance company?

There is something called a statute of limitations, which is the period of time in which it is permissible to file a law suit. This can be a tricky area of the law, though, so a bad faith attorney should be consulted to determine the statute of limitations applicable to your matter.

What is tort reform, which many politicians seem to be talking about? Is it good for the consumer?

Shernoff Bidart Echeverria LLP believes that tort reform is aimed at protecting corporate profits and making it much harder for the common citizen to confront a mighty corporation on equal footing. The so-called reform refers to limiting the legal remedies available to consumers when they are defrauded or otherwise taken advantage of. For example, tort reform would put a cap on punitive damages and damages for emotional distress and reduce statutes of limitations.

Is it as easy to sue an HMO as it is sue a regular insurance company?

It depends on the case, but Shernoff Bidart Echeverria LLP won the largest verdict against an HMO in history. By and large, it is tougher to pursue a court case against an HMO because of the greater number of legal restrictions that apply. In the event of a valid dispute with an HMO, a policyholder should consult one of our firm’s qualified lawyers to ascertain if these restrictions apply.

Do any insurance companies have particularly bad or good track records in handling policyholder claims?

It is impossible – and unfair – to generalize. Personnel and management changes in insurance companies occur frequently and can result in an increase – or a decrease – in unfair claims handling practices. No one carrier can be labeled the most notorious; likewise, probably no major insurance company has been immune from legitimate bad faith litigation.

If I pursue my claim in court, will I be punished with a higher premium?

Your pursuing a legitimate claim, even in court, does not automatically give the insurance company the right to punish you with higher premiums. After all, what is the point of paying for insurance if you are afraid of filing a valid claim or protesting the unfair handling of a claim? Additionally, there are a number of restrictions that can apply to raising premiums. For example, if you are a member of a group policy, the whole group premium must be raised – not just yours. In other cases, the insurance company may have to receive approval from the Department of Insurance to raise rates.

What is the philosophy behind punitive damages awards?

If a policyholder commits insurance fraud, he or she may go to jail. Because insurance companies don’t go to jail when they commit fraud, they must be punished monetarily. The only way to monetarily punish a company that makes millions or billions of dollars in annual revenue is to take enough of its profit to make the punishment felt. Yet amazingly, most punitive damage awards represent only a tiny fraction of a company’s surplus.

How does Shernoff Bidart Echeverria LLP decide which cases to handle?

Our Intake Department is staffed by new case analysts who personally talk with each and every person who contracts our firm. These analysts record the details of the scenarios they hear and present them to our weekly new case conference. At this conference, our attorneys discuss the merits of each case. If a case is deemed to have sufficient merit, it is accepted, and a retainer agreement is signed with the client.

If my case is accepted by Shernoff Bidart Echeverria LLP, am I going to be involved in a trial?

Not necessarily. In fact, the majority of cases we handle are resolved by settlement, which can occur right away, prior to a scheduled trial or even during a trial. Your dispute may also be mediated by a neutral third party, who serves to help both sides reach an agreement.

Can I sue my insurer for emotional distress resulting from the bad faith handling of my claim?

In general, yes. In many instances, an insurance companys unreasonable denial or delay of a valid claim can result in life-altering misfortunes, such as repossession of property, refusal of needed medical care, foreclosure of a business, etc. These events naturally can have substantial emotional and/or physical repercussions, and those who suffer them are often compensated when bad faith is substantiated.

What are punitive damages? How does one collect them?

In addition to awarding a plaintiff actual damages and damages for emotional distress and/or physical injury, the court may assess punitive damages against an insurance company to serve as a punishment and deter the company from acting in bad faith again. For this to occur, it must be proven that the insurer acted with malice, fraud or oppression.

Why don’t all lawyers work on the contingency fee basis?

Many corporate lawyers and lawyers who defend insurers are paid by very wealthy companies. As these lawyers often defend those companies, there is no winning verdict from which to take a percentage. So they must charge by the hour. Because of this, they benefit from lengthening the paper trail involved in legal actions. The longer the case drags on, the more difficult it is for a law firm working on a contingency – fee basis to sustain its cause of action against them – and the more hours they are able to bill their clients.

Why is it called “bad faith” insurance law?

Thanks to senior partner William Shernoff’s precedent-setting case, Egan v. Mutual of Omaha (1979), insurance companies are legally bound by a “covenant of good faith and fair dealing” in treating their policyholders. When an insurer breaches this covenant, by unreasonably delaying or denying payments, for example, it is acting in bad faith and can be sued for actual and consequential damages as well as punitive damages. Hence, although the term sounds negative, it is a huge plus for policyholders, as it provides substantial recourse against insurance companies that mistreat the people they serve.

Lawyers at Shernoff Bidart Echeverria LLP work on a contingency fee basis – what exactly does that mean?

It means that there are no hourly fees assessed to our clients. We charge a fee only if and when we are successful in recovering money on behalf of our clients. Only when a verdict or settlement is reached and paid to a client do we receive a percentage of that. If a settlement is not reached or the case is lost, we receive no fee whatsoever.

Why does Shernoff Bidart Echeverria LLP work on a contingency fee basis?

The reason is simple. It is to allow anyone – not just the privileged or wealthy – access to the legal system. The majority of our clients cannot afford to pay the hourly fees associated with undertaking a legal action, especially against multi-million dollar enterprises such as insurance companies. By enabling anyone to retain the services of talented bad faith lawyers, the contingency fee gives the little guy a fighting chance.